Dan Loeb Is Nominating Himself And Two Others To Sothebys' Board

Dan Loeb has nominated himself and two others — Harry J. Wilson,
and Olivier Reza — to Sothebys' board, to be voted on at the
body's 2014 annual, according to
a filing.

Loeb's hedge fund, Third Point Partners has a 9.2% stake in the
company, and has agitated that the company sell assets and return
the proceeds to shareholders.

"The Company’s focus on returning capital to shareholders was
long delayed, but welcome," said the filing. "Additionally,
Sotheby’s effort to value its London and New York City
headquarters for possible sale shows an overdue recognition of
the importance of optimizing the Company’s balance sheet."

But the filing goes on to say that those moves aren't enough. For
Third Point, it must be out with the old and in with the new as
"the entrenched Board also lacks an expert in the type of
fundamental corporate restructuring that Sotheby’s must
undertake."

We believe these prompt and long overdue developments make the
case that the Company and all shareholders will benefit from
having an owner’s perspective in the boardroom. While the
Reporting Persons currently own almost 10% of the Company’s
common stock, the Company’s Directors’ collective holdings are
less than 1%, with only two members of the Board holding above
0.1% of shares outstanding. The Board’s refusal to fully embrace
its shareholders’ desire for change was revealed by its adoption
of a “poison pill” in October. We believe the pill has been put
into place solely to entrench the current Board and is wrongful.
As a response to shareholder demands for increased transparency
and accountability, the pill demonstrated that this Board’s
paramount interest is in ensuring its members are protected
rather than maximizing value by considering shareholders’
(evidently valid) suggestions for improvement. No action could
have revealed more clearly the need for new blood and fresh views
in the boardroom at this critical inflection point for Sotheby’s.

The Reporting Persons also believe the entrenched Directors lack
the fresh perspective necessary to overhaul the Company’s
challenged operational structure and cure its cultural malaise.
Institutional Shareholder Services recently released “QuickScore
2.0” guidelines for optimal board structure, stating that “tenure
of more than nine years (can)…potentially compromise a director’s
independence.” Using this metric, Sotheby’s current Board fares
poorly, with five of its twelve current Directors in service for
over nine years and 75% of current directors seated for at least
seven years.

The Reporting Persons contend that the entrenched Board also
lacks an expert in the type of fundamental corporate
restructuring that Sotheby’s must undertake. The tasks ahead for
this Board remain formidable – including critical cost-cutting
treated only superficially to date and further leveraging the
company’s brand and market knowledge to capture a greater share
of the global art profit pool by refocusing online initiatives,
increasing private sales, and taking a larger slice of the
contemporary art market. It is a matter of concern to all
shareholders that no Board member today possesses a demonstrated
track record in this type of restructuring.

Finally, the Reporting Persons believe that despite the recent
appointment of Domenico De Sole, all shareholders will benefit
from further depth of experience in Sotheby’s key business
building block: luxury customer relationship development.

Based on these views, the Reporting Persons today provided formal
notice to the Issuer that they will nominate Daniel S. Loeb,
Harry J. Wilson, and Olivier Reza (the “Third Point Nominees”)
for election to the Board at the 2014 Annual Meeting.